Chinese and Indian banks and refineries—long key buyers of Russian crude—are beginning to adjust their operations in response to U.S. sanctions on Russia’s two largest oil companies, Lukoil and Rosneft, a U.S. Treasury official said on Thursday. The Trump administration imposed the sanctions last month in a bid to restrict revenue flowing to Moscow as its war in Ukraine nears its fourth year. The move directly targets the most important suppliers in Russia’s fossil-fuel sector and places added pressure on the countries that have become its most dependable customers.
According to the Treasury official, many financial institutions and energy firms in China and India are now taking steps to limit their exposure. The official described these entities as “risk averse,” noting that they recognize the importance of maintaining stable relationships with Western economies and are therefore moving to comply with the restrictions. While China and India have continued to buy discounted Russian crude throughout the conflict, U.S. officials believe that tighter enforcement could make doing so more difficult by discouraging banks from processing payments or extending credit tied to sanctioned firms.
The shift, if sustained, could mark one of the most meaningful cracks yet in Russia’s energy diplomacy, which has relied heavily on Asian markets to offset declining sales to Europe. Washington hopes that stricter compliance by key buyers will constrain Moscow’s ability to finance its military operations. But officials caution that the ultimate impact will depend on how aggressively China and India enforce the limitations and whether Russian producers find alternative channels to keep shipments flowing despite growing pressure.
